{
  "title": "Digital Currencies and Energy Consumption",
  "publication": "FinTech Notes, June 7, 2022",
  "sourceUrl": "https://www.imf.org/en/publications/fintech-notes/issues/2022/06/07/digital-currencies-and-energy-consumption-517866",
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  "summary": "Whether in crypto assets or in CBDCs, design choices can make an important difference to the energy consumption of digital currencies. This paper establishes the main components and technological options that determine the energy profile of digital currencies.",
  "sections": [
    {
      "heading": "Key findings",
      "content": "- Design choices can make an important difference to the energy consumption of digital currencies.\n- For distributed ledger technologies, the key factors affecting energy consumption are the ability to control participation and the consensus algorithm.\n- Crypto assets like Bitcoin are characterized as wasteful in terms of resources.\n- Other digital-currency designs could be more energy efficient than existing payment systems."
    },
    {
      "heading": "Comparative energy profile and evidence base",
      "content": "- The paper establishes the main components and technological options that determine the energy profile of digital currencies.\n- It draws on academic and industry estimates to compare digital currencies to each other and to existing payment systems."
    },
    {
      "heading": "Implications for CBDC design",
      "content": "- The analysis derives implications for the design of environmentally friendly CBDCs.\n- Policy-relevant levers highlighted:\n  - Control of participation in the ledger (permissioned vs permissionless architectures).\n  - Choice of consensus algorithm (energy-intensive proof-of-work versus more efficient alternatives)."
    },
    {
      "heading": "Scope and framing",
      "content": "- Covers both crypto assets and central bank digital currencies (CBDCs).\n- Emphasizes technological design choices as central determinants of energy consumption outcomes.\n\n---\n\n Content in this bundle\n\n- Digital Currencies and Energy Consumption; June 7, 2022\n  - Digital Currencies and Energy Consumption; June 7, 2022 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Digital Currencies and Energy Consumption; June 7, 2022 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/fintech-notes/issues/2022/06/07/digital-currencies-and-energy-consumption-517866"
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    "Authors: Itai Agur, Jose Deodoro, Xavier Lavayssière, Soledad Martinez Peria, Damiano Sandri, Hervé Tourpe, Germán Villegas-Bauer",
    "Published: June 7, 2022",
    "Series: FinTech Notes",
    "DOI: https://doi.org/10.5089/9798400208249.063",
    "Design choices can make an important difference to the energy consumption of digital currencies.",
    "For distributed ledger technologies, the key factors affecting energy consumption are the ability to control participation and the consensus algorithm.",
    "Crypto assets like Bitcoin are characterized as wasteful in terms of resources.",
    "Other digital-currency designs could be more energy efficient than existing payment systems.",
    "The paper establishes the main components and technological options that determine the energy profile of digital currencies.",
    "It draws on academic and industry estimates to compare digital currencies to each other and to existing payment systems.",
    "The analysis derives implications for the design of environmentally friendly CBDCs.",
    "Policy-relevant levers highlighted:",
    "Covers both crypto assets and central bank digital currencies (CBDCs).",
    "Emphasizes technological design choices as central determinants of energy consumption outcomes.",
    "**Digital Currencies and Energy Consumption; June 7, 2022**"
  ],
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